ACTV Migrating Internet-TV Product


ACTV Inc. wants to tap the consumer market by combining its
technology for enhancing television programming with synchronized Internet content,
pushing further into a crowded field.

The company is launching its software-based application,
dubbed "HyperTV," into the commercial entertainment-programming market after two
years of development as a private-network platform for education systems, "e-School

Since its introduction in early 1996, HyperTV has grown
into a business that is expected to generate $3 million in revenue this year, according to
ACTV chairman and CEO Bill Samuels.

HyperTV delivers streamed Internet video, Web URL (uniform
resource locator) addresses, advertising and other data or links to viewers' personal
computers, in synchronization with broadcast or cable programming on their television
sets. PC users with TV-tuner cards can view programming and HyperTV-enhanced Internet
content simultaneously on their monitors.

Besides getting multimedia programmers, portal owners and
other content providers to license HyperTV software, creating a stream of royalties to
ACTV, the company wants vendors to embed HyperTV in their advanced-digital set-top boxes.
This way, viewers can get simultaneous video and special Internet content on regular
television sets.

Until more advanced boxes, such as General Instrument
Corp.'s DCT-5000, are available and deployed, most HyperTV viewers must get the
Internet portion over their PCs -- an arrangement that Samuels said is more lucrative than
cumbersome. He noted studies indicating that 13 million people Web surf while watching TV,
while as many as 25 million households have PCs in the same rooms as their TVs.

"The current market is probably as much analog
television and being online as it is digital TV," Samuels said.

ACTV sees HyperTV as an expansion of the
interactive-broadcast platform that it began testing last month on Tele-Communications
Inc.'s Dallas digital system. It hopes to roll that platform out widely by the third
quarter, after completing its integration with TCI's Headend in the Sky.

Michael Shronstrom, director of institutional research for
Denver-based investment banker Neidiger Tucker Bruner Inc., said HyperTV not only
represents a lower capital requirement going forward than individualized TV, but it also
provides competitive advantages through its patented technology for synchronizing Web and
TV content.

"The original business model called for a multiyear
build-out of the individualized TV technology," Shronstrom said. "That model has
been sort of supplanted by what HyperTV can bring to the company."